Exchange rate risk management
Subtitle: evidence fron East Asia
By: George Allayannis, Gregory W. Brown, Leora F. Klapper.
Contributors: Brown, Gregory W.; Klapper, Leora.; World Bank. Development Research Group. Finance.
Series: Policy research working paper ;; 2606; Policy research working papers ;; 2606.
Publisher: World Bank, Development Research Group, Finance
Published: 2001
Place of publication: Washington, D.C
Language: eng
Number of pages: 35
Subjects: Foreign exchange -- East Asia.; Risk management -- East Asia.; Derivative securities -- East Asia.; Debts, External -- East Asia.; Hedging (Finance)
Description: In a large sample of East Asian nonfinancial corporations, firms using foreign currency derivatives had distinctive characteristics, such as larger size and foreign debt exposures. Unlike in studies of U.S. firms, there was only weak evidence that liquidity-constrained firms with greater growth opportunities hedged more. Firms appeared to use foreign earnings as a substitute for hedging with derivatives, and to engage in "selective" hedging. There was no evidence that East Asian firms eliminated their foreign exchange exposure by using derivatives. And firms using derivatives before the crisis performed just as poorly as nonhedgers during the crisis.
Notes: Includes bibliographical references (p. 30-32).
"May 2001"--Cover.
Also available on the World Wide Web under title Capital structure and financial risk.